Sask. forecasting $743.5M deficit in mid-year financial report, up $470.5M from budget

The provincial government says increases to crop insurance claims later in the growing season are a main reason for Thursday’s mid-year deficit forecast of $743.5 million, which is up more than $470 million from the budget.

“Although weather conditions were good early in the season, very dry conditions in many regions of the province during the summer significantly impacted crop yields and quality, particularly with canola. These fluctuations led to higher crop insurance claims, increasing the agriculture expense theme by $385 million, or 25.1 per cent, from the 2024-25 budget,” the province said in a news release, adding it’s important to note that producers help fund the crop insurance program through premiums they pay into it.

"Our economy remains strong in Saskatchewan but dry weather conditions in some region of the province during the summer significantly impacted crop yields and quality, particularly with canola. These fluctuations led to higher crop insurance claims,” Minister of Finance Jim Reiter said during a press conference on Thursday.

Responding to the mid-year financial report, NDP MLA and shadow finance minister Trent Wotherspoon said that the Saskatchewan Party should have updated crop insurance costs before the election but failed to do so.

“[They] ought to have known that there was much more pressure on crop insurance, and there’s no good excuse for not updating those numbers they’re dealing with,” he said.

“They should have gone into the election with a more accurate picture on these sorts of numbers.” 

Total expense is forecast to increase by $745.5 million from the budget, the province said.

Along with an increase in crop insurance claims, the province said that the Protection of Persons and Property expense theme increased by $128 million. “Primarily due to operating pressures in correctional facilities and wildfire response efforts. The Health expense theme also increased $100 million to address service and volume pressures,” the province said.

Total revenue is expected to increase by more than $275 million from budget time, which the province says will partially offset the increase to expenses.

“The largest areas of growth are in the Other Own-Source and Taxation revenue themes. Other Own-Source is forecast to increase by $235.5 million compared to budget due to improvements across this category, including increases in investment and insurance income. Taxation is also forecast to increase by $133 million, primarily due to an increase in corporate income taxes. This increase is a result of larger than anticipated 2023 tax assessments, which were supported by the province's strong economy,” the release said.

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Gross debt was forecast to be $35.2 billion on Thursday, an increase of more than $388.5 million from the budget, but a decrease of more than $12 million from the province’s first quarter financial report.

The province says its net debt-to-GDP ratio is expected to be 13.9 per cent at the end of the fiscal year, which is better than the projection in the budget of 14 per cent.

According to the province, 13.9 per cent is the second-best net debt-to-GDP ratio among all provinces.

The full mid-year report can be seen here.

- With files from Caitlin Brezinski